Secure Funding Pty Ltd v Brosnahan - [2012] WASC 398

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: SECURE FUNDING PTY LTD -v- BROSNAHAN [2012] WASC 398

CORAM: MASTER SANDERSON

HEARD: 18 OCTOBER 2012

DELIVERED : 26 OCTOBER 2012

FILE NO/S: CIV 1418 of 2012

BETWEEN: SECURE FUNDING PTY LTD
Plaintiff
AND
KIERAN JAMES BROSNAHAN
First-named Defendant
BLAZENKA SUNJICH
Second-named Defendant

Catchwords:

Mortgage action - Application for summary judgment - Turns on own facts

Legislation:

Nil

Result:

Judgment entered for the plaintiff

Category: B

Representation:

Counsel:

Plaintiff:    Mr G S Tinsley
First-named Defendant             :    No appearance
Second-named Defendant         :    In person

Solicitors:

Plaintiff:    Ashurst Australia
First-named Defendant             :    No appearance
Second-named Defendant         :    In person

Case(s) referred to in judgment(s):

Deputy Commissioner of Taxation v Heaton (1997) 35 ATR 450
Trainor Asia Ltd v Calverley [2007] WADC 124

MASTER SANDERSON: By chamber summons dated 24 August 2012 the plaintiff sought an extension of time within which to bring a summary judgment application and judgment on its claim. In the alternative it sought to strike out the whole of the defence and for judgment.
This is what is described in the Rules of the Supreme Court 1971 (WA) as a 'mortgage action'. The defendants and the plaintiff, Secure Funding Pty Ltd (Secure Funding), entered into a loan agreement dated 7 February 2007. Secure Funding agreed to advance to the defendants an amount of up to $288,000 at a variable interest rate for a term of 30 years. As security for the loan the defendants provided in favour of Secure Funding a first ranking mortgage over their interest in a property at 29 Talbot Road, Swanview.
By written notice dated 19 January 2012 Secure Funding issued each of the defendants with a notice of default under the loan agreement and the mortgage. The default notice was based on the defendants' failure to make required loan repayments on 20 November 2011 and 20 December 2011. The plaintiff says the defendants failed to remedy the defaults within 31 days of service of the notice of default, or at all.
On 13 March 2012 Secure Funding filed a writ of summons indorsed with a statement of claim seeking payment of the total outstanding under the loan agreement and vacant possession of the property. The plaintiff was unable to serve both defendants and sought orders for substituted service against the second‑named defendant. These orders were obtained on 14 June 2012. The plaintiff served the second‑named defendant with the statement of claim by post on 25 June 2012. In or about late July 2012 Secure Funding's solicitors became aware that the defendants had entered an appearance in late June 2012. The defendants did not serve Secure Funding's solicitors with a copy of their appearance at that time or at all.
On 27 July 2012 Secure Funding's solicitors sent the defendants a letter advising the defendants, as they had not filed a defence to the Supreme Court proceedings, Secure Funding was entitled to apply for default judgment against them. On 7 August 2012 Secure Funding's solicitors became aware that the second‑named defendant had filed a defence on 3 August 2012. The defence was not served on Secure Funding's solicitors at that time or at any stage.
At some stage the defendants commenced proceedings in the Magistrates Court against Secure Funding. It does not emerge from the papers when the proceedings were commenced but the defendants obtained default judgment against Secure Funding on 12 June 2012. Secure Funding say they never received service of those proceedings. On 30 July 2012 Secure Funding filed an application in the Magistrates Court to set aside the default judgment. The application was successful and the judgment was set aside. Based upon the uncontested evidence provided by Secure Funding the magistrate was satisfied the proceedings had never been served and the judgment was irregular. It was therefore set aside as of right. The fact there may have been a judgment in existence at some stage can in no way benefit the defendants in these proceedings.
The first issue is whether there should be an extension of time to allow the plaintiff to apply for summary judgment. In order to obtain the extension of time Secure Funding must explain the delay in making the application out of time: see Deputy Commissioner of Taxation v Heaton (1997) 35 ATR 450, 453. In support of its application Secure Funding relies on the following facts to explain the delay in making the application.
First, the defendants' appearance was not served on Secure Funding's solicitors so Secure Funding was not aware for a substantial period of time that an appearance had been filed. Second, the defence was not filed until 3 August 2012 and was not served on Secure Funding's solicitors at all. Third, Secure Funding chose to make the application for summary judgment after its application to set aside the judgment in the Magistrates Court had been determined. It submits this was a reasonable approach and relies on the decision in Trainor Asia Ltd v Calverley [2007] WADC 124 to support that proposition.
In my view leave to bring this application out of time should be granted. There is no explanation provided by the defendants as to why they did not serve either the appearance or the defence. Nor is there any explanation as to why proceedings were issued in the Magistrates Court let alone why judgment was entered when it must have been apparent to the defendants the proceedings had not been served. In large measure the delay in the plaintiff bringing these proceedings is down to the defendants - they did not serve documents when they should have. They cannot be permitted to benefit from their own default. Accordingly the extension of time to make this application will be granted.
Turning then to the application itself. The plaintiff has satisfied the requirements of O 14. The application is supported by an affidavit of Matthew Graeme Cook sworn 12 September 2012. Perhaps unconventionally Mr Cook does not annexe a copy of the statement of claim and swear to the truth of its contents. Rather in pars 5 ‑ 17 of his affidavit he goes through the circumstances of the loan, the way in which the default arose, the failure to remedy the default, and his belief in the entitlement of the plaintiff to judgment. In par 19 he swears that he does not believe the defendants have a defence to the action. So all of the elements of O 14 r 2(1) are satisfied.
The defendants rely on an affidavit of Blazenka Sunjich sworn 4 October 2012. Ms Sunjich represented herself at the hearing and although Mr Brosnahan was not represented I approached the matter on the basis if Ms Sunjich established she had an arguable defence to the claim then both defendants should have leave to defend. In addition to her affidavit Ms Sunjich handed up a number of documents upon which she wished to rely. I have taken these documents into account in reaching my decision.
By pars 1 ‑ 7 of her affidavit Ms Sunjich explains the circumstances in which she and her husband entered into the loan. None of these background facts go anywhere in answering the plaintiff's claim. It would seem the defendants got into difficulty repaying the loan in 2008. In the first half of 2009 the defendants applied for release of their superannuation entitlements. A lump sum payment was made by Ms Sunjich's parents and as I understand her evidence by the middle of 2009 the loan was brought up to date. These matters are covered by pars 8 ‑ 14 of Ms Sunjich's affidavit.
Unfortunately the difficulties did not end there. The remainder of the affidavit deals with concerns Ms Sunjich had about default fees and legal costs which were set against her loan. She also refers to payments from superannuation. But nowhere does she address the default which prompted the default notice or the failure to rectify the default. In other words there is no evidence which answers the plaintiff's claim.
Further it is not clear what relevance the material Ms Sunjich tendered at the hearing has to the dispute in general. As I have mentioned the Magistrates Court action is of no relevance. Nor is the mere fact of the release of superannuation to be used to make payments under the loan of any consequence. By accepting money released from a superannuation fund a mortgagee does not compromise any of its rights. It is entitled to treat payments drawn from superannuation funds in the same way as it would treat any other lump sum payment.
In my view there is no defence to this action. The plaintiff is entitled to judgment. It is also entitled to its costs. The plaintiff should bring in a minute of orders reflecting these reasons.